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QuickTake:
The Eugene Water & Electric Board is in the middle of shaping the city’s energy future — a decision tied to a nearly $2 billion price tag. Since EWEB is funded largely by its customers, the results of that choice will ultimately show up on utility bills.
A previous version of this story incorrectly stated the yearly cost for EWEB’s energy supply contract. The total cost is around $100 million a year depending on the contract options chosen.
When you turn on a lamp in Eugene or Springfield, there’s a good chance the electricity came from a hydropower dam hundreds of miles north, in the Columbia River Basin.
Nearly 80% of Eugene Water & Electric Board’s power comes from the Bonneville Power Administration, which generates power from 31 dams on the Columbia and its tributaries. The Springfield Utility Board also buys all its power from the Bonneville Power Administration, a federal agency.
With its BPA contract expiring, EWEB is deciding how to structure the next one — a nearly $2 billion choice that utility customers will ultimately pay. EWEB analysts are finalizing their recommendations for commissioners to review at a June 17 work session.
Lookout Eugene-Springfield spoke with EWEB spokesperson Aaron Orlowski to explain what is happening behind the light switch and what this contract process could mean for your wallet.
What is happening?
EWEB has to sign a new contract with the BPA by the end of the year, well ahead of its old contract’s 2028 expiration date.
Shopping for a utility’s energy mix is a bit like a restaurant sourcing ingredients — it’s about finding the right balance of cost, quality, and reliability to serve its customers. And what’s on the menu may depend on the season.
For EWEB, that means thinking about how it will service customers’ extreme peaks on the coldest winter days and on the hottest summer days. Like a chef deciding what goes on the plate, analysts have refined the options.
“The contract options entail several of what [Bonneville Power Administration] calls products, and those products are different ways that they deliver energy to utilities,” Orlowski said. “What our team has done is they’ve been analyzing these different product options, and they’ve narrowed the field to two of them, and at this point, we’re debating between the two.”
Resource analysts are choosing between two contract products: one where EWEB actively manages its own energy supply and another where BPA handles day-to-day operations. While the all-in option costs slightly more upfront, it offers more price certainty, something EWEB sees as a benefit for customers over time.
The contract extends for the next 16 years.
What uncertainty is at play?
Economics 101 tells us that any financial analysis comes with a range of uncertainty, especially if it covers nearly two decades of forecasting. In the utility world, generally that means not knowing how much it will cost to meet customer demand should it exceed supply.
Buying extra energy at the last minute is an unpredictable cost and it’s more expensive than buying power in advance.
For example, in July of last year, EWEB’s electricity demand nearly broke its all-time summer record. EWEB’s demand, plus demand from other utilities around the region, strained the ability of power producers to keep up, and wholesale energy prices soared.
In addition to this, forecasting is becoming increasingly difficult in a new era of uncertainty, both politically and ecologically.
The Trump administration has brought funding cuts and policy shifts that are disrupting the energy sector, while the impacts of a rapidly changing climate alter the availability of natural resources. Right now there are more questions than answers.
“How does that impact streamflows, which directly affects how much hydropower we can produce?” said Orlowski, summarizing the kinds of questions his team considers. “What happens to the regulatory environment — do regulations get stricter or looser? And how does that impact supply?
“The biggest one for us is how markets change,” he said. “Will it cost more or less in the future to buy power, build a solar farm, or invest in newer energy technologies like wind or other emerging sources?”
What does this mean for my utility bill?
What is certain is that EWEB, a nonprofit utility, is funded by customer revenue.
“The rates we end up paying to the Bonneville Power Administration are passed directly to our customers,” said Orlowski. “It is the largest line item in EWEB’s budget, and it is essentially the largest line item in a customer’s bill.”
Generally, rates are not fixed in EWEB and BPA contracts, which guarantee a supply — not a cost.
The upcoming contract is expected to cost nearly $2 billion over the next two decades, regardless of which of the two “products” EWEB selects. The total cost of each product per year is around $100 million, depending on the product. The estimated cost difference between the two leading product options is $1.6 million per year.
EWEB’s last contract cycle started in 2011. Over its course, nearly 40 cents of every dollar collected from customers has gone toward purchasing power from the Bonneville Power Administration. This is expected to stay about the same with the new contract, said Orlowski.
However, EWEB didn’t forecast the specific rate changes under the new contract options.
The utility’s board of commissions will vote in July on a contract. Rates are not expected to change immediately following the decision, said Orlowski.
